In a lawsuit filed Friday morning in Jefferson County Civil Court, Gardendale resident Jay Campbell filed a class action complaint against the city of Gardendale and J.T. Smallwood, the tax collector of Jefferson County.
The lawsuit alleges that the 10-mill ad valorem tax that the city began collecting in 2014 is illegal. The original 5-mill increase was approved by the city council and the second 5-mill increase was approved by a vote of the citizens. According to the lawsuit, those taxes were not legal because the recent federal appeals court ruling said the purpose of those taxes—to fund a city school system—are not legal and Gardendale is "now legally precluded from forming a school district and operating schools," according to the filing.
"Gardendale has publicly stated that it has been segregating the proceeds of the Municipal Taxes, in furtherance of its efforts to for a legally recognized school district," the lawsuit states. "The reality, however is that Gardendale has been using funds collected from the Municipal Taxes for (1) paying school administrators to supervise a non-existent school system, and (2) funding lawyers to prosecute a catastrophically, and now finally, unsuccessful effort to form a splinter district."
The lawsuit proposes one of two alternatives that center on the same theory—residents cannot be double taxed for the same thing and the county controls and has always controlled the schools in the city. Since the county already collects an ad valorem tax for the schools, the city cannot add a tax for the same purpose. According to the lawsuit, either 8.8 mills of the 10-mill city tax is illegal or all 8.8 mills that are allocated for the county school are illegal because of the duplicated taxation.
The lawsuit asks for:
(1) a declaratory judgement that one of the taxes is illegal;
(2) an injunction requiring Gardendale to pay all the taxes collected into the court pending the outcome of the case;
(3) an injunction prohibiting one of the taxes;
(4) an order directing payment of the escrowed funds to the plaintiff and other members of the class-action;
(5) other relief.
A previous lawsuit, filed by Dennis Gamble, made many of the same arguments but was dismissed prior to the appeals court ruling.